The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: azu612 on December 10, 2016, 08:09:34 PM
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I am a teacher and I am contributing to the 403b account offered by my district. They say that you have to contribute to one of the accounts that they sponsor. I am with AXA. The district offers a 600 dollar match each year. I only contribute enough to get the match. I've heard a lot about these being the worst accounts out there. However, I figured it was worth at least getting the match.
Does anyone have any advice on what I could do with this account to maximize the money?
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Does anyone have any advice on what I could do with this account to maximize the money?
Put more into it.
You should look at all the fund options available.
See also To 401k or not to 401k? That is the question. (http://forum.mrmoneymustache.com/investor-alley/to-401k-or-not-to-401k-that-is-the-question-43459/) That situation is similar to yours.
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Usually there are a number of different options within a 403b, what are your alternatives to AXA?
Aspire is who my wife is with and offer access to vanguard. Security Benefit also have a good option with the NEA DirectInvest plan.
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This is the list of possible providers aside from AXA: GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.
I've heard there are fees if you transfer. I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....
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Check out Met Life's fees and funds. Sometimes they are ok, and other times they are awful.
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This is the list of possible providers aside from AXA: GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.
I've heard there are fees if you transfer. I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....
Unfortunately, some 403b plans make it difficult to determine the fees you pay for different vendors and funds.
See NY Times first in a series about 403(b)s with public K-12 (https://www.bogleheads.org/forum/viewtopic.php?f=10&t=201781) for discussion and links.
Although it may be difficult or tedious, getting a list of funds available to you and the fees charged per fund (and per vendor if applicable) is the only way to make an informed choice.
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I'll take a look. So if they allow me to put the money in index funds this would be best? This is why I'm hesitant to add money to this account vs. another investment.
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I'll take a look. So if they allow me to put the money in index funds this would be best? This is why I'm hesitant to add money to this account vs. another investment.
Yes, depending on the fees.
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Yes, depending on the fees.
+1 on this.
I got all starry eyed when I saw that our 403b plan began offering Vanguard fund options. After doing some digging, I found that I would be charged a lot more in fees for carrying these funds in my plan. The lower cost options were performing nearly as well, so I opted to stay with those.
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I'll check it out. Thanks!
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Another thing to remember is that if/when you leave your job (or rather leave the school district) you can transfer the money in your 403(b) to a traditional IRA wherever you want. So the crappiness of the choices matters a lot if you're planning on staying for your entire career, but if you're only planning to put in 3-5 years, the tax savings are probably worth paying a few years of high fees (although you will still want to avoid annuities and "load" funds).
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I just tried to ask the financial advisor about the fees and he basically just sent me some long confusing list and said we could meet. I'm thinking I should just tell him to put it all in the index funds and call it a day. I'm not sure how long I'll stay. It's good for now.
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This is the list of possible providers aside from AXA: GALIC, Lincoln Investment, Met Life, NY Life, Security Benefit Life, and Valic.
I've heard there are fees if you transfer. I'm not really sure what the best course of action is, or if I should tell the broker to put all of the money in index funds, etc....
Out of this list my first stop would be Security Benefit and the NEA DirectInvest plan, of course the Security Benefit adviser may not be thrilled!! You don't need to be an NEA member to enroll either.
https://www.bogleheads.org/forum/viewtopic.php?t=180418
http://www.nearetirementprogram.com/nea-directinvest
https://www.securitybenefit.com/individuals/products/mutual-fund-custodial/nea-directinvest.aspx